Unilever has finalised its withdrawal from Russia through the sale of its local operations, marking a significant corporate exodus influenced by geopolitical tensions.
- The sale to Arnest Group includes Unilever’s entire Russian business and four production facilities, signifying a complete exit from the region.
- This strategic move follows external pressures urging companies to distance themselves from Russia amid the ongoing conflict between Russia and Ukraine.
- The transaction, valued significantly below the division’s fair market worth, highlights the complexities of divesting in challenging geopolitical climates.
- Unilever joins other major FMCG firms that have reevaluated their Russian operations in response to escalating geopolitical tensions.
Unilever has officially completed the sale of its Russian operations to Russian manufacturer Arnest Group. This transaction, encompassing all of Unilever’s business activities and assets in Russia, represents a full divestment from the country. The sale also includes four manufacturing facilities, underlining the company’s comprehensive exit from the Russian market.
The decision to sell was driven by rising international pressure on companies to cease operations in Russia due to the ongoing conflict with Ukraine. Campaigners have increasingly targeted firms operating in Russia, accusing them of indirectly supporting the war efforts. Unilever, amongst other British food businesses, faced calls for the revocation of their royal warrants due to their Russian ties.
Financially, the sale to Arnest Group is valued between £300 million and £334 million, approximately 50% less than the perceived market value of the Russian division. This financial outcome reflects the difficulties inherent in conducting business transactions under current geopolitical constraints and the urgency perceived by companies to disassociate from Russian operations.
Unilever’s CEO Hein Schumacher highlighted the painstaking process involved in preparing the Russian business for sale. The company undertook complex procedures, such as untangling IT systems and adapting brand identity to suit Cyrillic script, ensuring a seamless transition of operations. “Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale,” Schumacher noted.
Other companies within the fast-moving consumer goods (FMCG) sector, such as Danone, are also reevaluating their presence in Russia under similar pressures. Earlier this year, Danone faced significant financial setbacks, including a £1 billion loss, following the enforced transfer of its accounts due to management control issues in the region.
Unilever’s exit from Russia exemplifies the increasing pressure on multinational corporations to navigate and respond to complex geopolitical landscapes.
